A Crazy Thought and A Crazy Good Talent!

Let’s have some fun today! For a change of pace I thought it a good idea to think way outside of the box and write about something that isn’t possible and wouldn’t really matter even if it was true. I’ll finish with my wife Kathy’s latest portrait of her son Jason at the bottom of the page.

Recently a question was posed to me by a reader, a really crazy question! He asked regarding the fact there has been no audit of U.S. gold since 1955, “what if the reason they refuse to audit the gold is because we have much MUCH more and they don’t want anyone to know?”. At first I just laughed and responded with a flippant answer, but then it dawned on me, would it even matter? Let’s break this down in several pieces and then make further assumptions to see if it would really matter.

First, the U.S. claims to have 8,400 tons of gold. For simplicity let’s call this amount rounded as one third of a trillion dollars or $350 billion. Let’s assume the vaults are actually bursting and have 3 times the amount of gold claimed. This would mean there is a nice round number of $1 trillion worth of gold sitting in the vaults. Would this amount “matter”? Would really and truly having “$1 trillion” mean or change anything?

Think about where we have come from and what has been done over the last 6 years to keep life as we know it going. The Fed has increased their balance sheet by well over $3 trillion while the Treasury has borrowed some $8 trillion more. You might also remember the Fed “secretly lent out” some $16 trillion all over the world and mainly to foreign entities. This was discovered in 2011 I believe, it was a shocker at the time but “oh well”, it means nothing now. My point being, in just the last 6 years, the Fed and Treasury have printed and borrowed over $10 trillion, so no, $1 trillion in the vault is no big deal.

But wait, “this is gold and not dollars” you say? Well yes, it is gold and we do know it can be pegged in price. If it is pegged too low, demand will outstrip supply and if too high then supply will come in to the bidders. Yes, there is a huge difference between sitting on $1 trillion worth of dollar bills and $1 trillion worth of gold, we can touch on this shortly but first let’s do a little more math. We have had several individual years where our fiscal deficit was over $1 trillion, so our 25,000 tons of gold would have already evaporated many times over. Let’s make another assumption that the rocket scientists in Washington D.C. decide to pull a “Roosevelt moment” and mark up the price of gold (since they have so much).

Let’s assume it is decided to mark gold up to $10,000 per ounce, what would this do? The flat out answer is “very little and certainly not enough”. Even if we truly did have three times the amount of gold we claim to have AND marked up the price nine or ten fold to $10,000, we still only cover the lunacy of the last six years! If we look at the big picture of Treasury debt and the Fed’s balance sheet combined, we are only halfway there. Looking at the entire picture which includes all debt and future obligations, the number is a staggering $200 trillion. This humongous stash of 25,000 tons of gold, priced at $10,000 per ounce is only equal to 5% of total current and future obligations!

Do you see what we just did here? This was a backdoor way of displaying how ridiculously cheap gold is currently compared to all of the debt that’s been underwritten. Yes I know, there will be those who say “Holter, you are an idiot. It doesn’t matter what the price of gold is because it’s not money anymore”. Really? (not the idiot part, the “money part”). Gold IS money. Yes, our government says it is not and does not want you to believe it is money …does that change the fact? Let me point something out to you, China believes gold is money, many other nations believe gold is money, can the U.S. “legislate” to foreigners? Foreigners are already “voting” their beliefs and pocketbooks by purchasing all the gold the world produces and quite a bit more.

To wrap this part up, let me just say that no, pigs do not fly unless they are in an airplane and no, the U.S. does not have more gold than we claim to have. Common sense tells you the gold supply and demand deficit has had to have been supplied from somewhere. This “somewhere” is obviously where the gold had been stored. ONLY the West, led by the U.S. had massive hoards of gold large enough to supply 1,000’s of tons of annual supply deficits. ONLY the West, led by the U.S. has had a motive to supply these deficits to support the value of the dollar and to depress the price of gold. Yet, all we hear from the U.S. when the topic of either the Fed or our depositories being audited are three things, either crickets, an audit is too expensive or “trust us”. As for the “too expensive” part, I think we can equate this to last year’s 5 tons of German gold… they didn’t get more because of transportation logistics. How funny!

As promised for several months, below is Kathy’s latest finished portrait, “Commanding Presence”. Forgive me if I sound like a cheerleader, I am her biggest fan! For those who have not followed my work and don’t know, Kathy now has a whopping two years of experience. She had never ever painted anything before and was basically self taught until last April when she began lessons once a week from a master portraitist. This portrait of her son Jason is her 5th portrait ever. Kathy plans to enter this in several national as well as international competitions.

I have never before seen in any occupation a learning and improvement curve similar to what she has done. She’s gone from zero to crazy good in only two years! Hopefully this particular portrait will win recognition in one these contests because of the “story” behind it. She will be competing with lifetime and internationally known artists. Any type of win amongst this type of international competition will be unheard of from someone of her experience.

Her website www.KathrynHolter.com is now up and still under construction, she can be contacted via the website should you desire a portrait done.

I hope you enjoy this portrait, I will enjoy her next one… for my birthday we did a photo shoot with my amigo Principe’ and got a fabulous shot I’d like to call “Hi Ho Silver!”. “Nothing doing” she said, it will be called “Rarin’ To Go!” because she hears the words silver and gold too often living with me!
Please click on the image if you have dropbox and I urge you to expand it as much as possible because the detail is AMAZING!Commanding Presence

41 Comments

gig
on February 2, 2015 at 6:02 pm

Hummm,,,,,I guess size does matter.

Bill Holter
on February 2, 2015 at 7:11 pm

the portrait is nearly life size.

gig
on February 3, 2015 at 6:27 am

Actually I was responding to the article and still admiring the portrait.

Very nice work Mrs. Holter and most difficult to work with angle lighting.
You captured the minute details of the shadows perfectly. Very impressive, I think you can quit you day job.

naiverealist
on February 2, 2015 at 6:53 pm

Kudos to your wife on her artistic abilities!

She is really, really good (but, of course, she knows that and doesn’t need my approval).

Bill Holter
on February 2, 2015 at 7:11 pm

thanks, she only has 2 years experience and will accept any and all compliments!

Ratman's Wife
on February 2, 2015 at 7:13 pm

Enjoyed your column as always. Your wife is one talented woman!

Bill Holter
on February 2, 2015 at 7:23 pm

a prodigy!

delschwartz
on February 2, 2015 at 7:14 pm

That is amazing,wow

Bill Holter
on February 2, 2015 at 7:23 pm

every piece is a giant leap, this was only her 5th portrait if you can believe that!

Mike mouse
on February 2, 2015 at 8:14 pm

Is Martin Armstrong crazy?

Bill Holter
on February 2, 2015 at 8:43 pm

…he does not believe gold is money, “dollars ” are.

Patricia
on February 2, 2015 at 9:02 pm

Bill, she is amazing. She is very talented because I am having trouble believing that is not a Photograph! The two of you are an amazing couple. Beauty, brains along with talent. My Mother painted & found it so relaxing & rewarding. So glad your wife discovered her talent because she is downright AWESOME! Simply Amazing!!

Bill Holter
on February 3, 2015 at 6:22 am

thanks Patricia. I went out downtown one night and asked people to look at the picture on an IPhone and tell me whether it was a photo or painting. 1 person out of a dozen said it was a painting …because he was an artist and looked at the background!

I agree with you Bill, it doesn’t matter how much gold the US has in the current financial system, but when it gets remonetized it will. But there may be something to the claim that the US has more gold than originally thought. They could have been accumulating over the last few decades when demand was low, in anticipation of the events we are going through. This may be why the scheme seems to be lasting longer than the math suggests possible. Not saying if this is true or not, just saying that it might be a possibility.

Bill Holter
on February 3, 2015 at 6:24 am

demand was not “low”, it has exceeded supply for at least 25 years.

Mark_BC
on February 3, 2015 at 10:35 am

Oh I wasn’t sure about that. I thought maybe in the 80’s and early 90’s when people weren’t very interested in it, supply may have exceeded demand.

Bill Holter
on February 3, 2015 at 11:30 am

possibly in the early 80’s after the peak in price but not since then.

Mike mouse
on February 3, 2015 at 2:40 am

May NATO invade Greece to enforce EU debts?

Bill Holter
on February 3, 2015 at 6:24 am

really?

Mia
on February 3, 2015 at 4:37 am

Lovely to see Kathy’s portrait of her son. What a wonderful work and you are justly proud. Kathy has a similar story to a friend of mine (won a major art award after struggling with overcoming a learning difficulty to learn how to airbrush). Kathy might like to check out Wendy’s website http://www.slowhandart.com

Keep up the good work! Both of you, in your respective fields!

Bill Holter
on February 3, 2015 at 6:26 am

your friend does excellent work!

kev
on February 3, 2015 at 5:05 am

hi bill. i have been a long time “lurker”.
am a 100% gold and silver maniac.
i couldnt resist logging in for the first time ever to ask you to pass on my huge congratulations to your wife.

i zoomed into the downloaded portrait. unbelievable detail. very impressed … kev

Bill Holter
on February 3, 2015 at 6:28 am

thanks Kev, I will pass it on to her. The eyelash shadows and beard freaked me out when I enlarged the picture 600%. Please feel free in the future to comment, and welcome aboard!

RD
on February 3, 2015 at 7:18 am

What a gift you wife has ! She may also try still life, it fits perfectly this hyperealism art.

Very impressive especially when beginning as an adult.

RD
on February 3, 2015 at 7:23 am

Bill,

Your wife surely already this organization but they are making some promotion and competition on art realism :

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